More and more small businesses are jumping on to the cloud to reduce their in-house IT and staff needs. But how do they use it and has it been a success story for all? Here’s some real-life examples.
If, 10 years ago, someone told you that you’d be doing away with the majority of your in-office computer equipment, would you believe them? Would you think that you’d no longer be buying discs of software, housing servers or even working at your desk?
That is the essence of cloud computing, and the reason why so many small businesses are taking the leap into the cloud.
While cloud computing is the current hot topic in IT, we decided to speak to those small businesses who are already there about how they’re using the cloud and what it means for their business.
While cloud is becoming a buzzword for many internet-based services, Peter James, managing director at cloud storage provider Ninefold, says that there’s more to it than that. “Cloud computing is utility computing. That’s really at the heart of it,” he says. “It’s self-service, no pre-commitment, which means there’s little investment in capital expenditure, and you pay only for what you use.”
When talking about cloud computing, James goes back again and again to a logical analogy made by Nicholas Carr in his book, The Big Switch. “Two or three generations ago, everyone moved from power generators to the electricity grid. In those days you had to have equipment to get you power. The same thing is happening with computer technology. Just the way a small business goes into an office or a shop and plugs in a power outlet to get the power they need, and they then get a bill each month and pay for what they use. That’s the way computing has gone.”
The variety of services that businesses can now access over the cloud is not limited to storage. Many different companies are finding their feet by accessing cloud services to limit the need for trained in-house staff in IT and even accounting. Bob Smith, CEO at Worklife Essentials, an internet-based service that provides information resources regarding childcare, school aged care and aged care in more than 120 countries, knows the benefits of passing on some in-house office procedures to AccountsTeam, a cloud-based accounts service. “It means we don’t have to run our own accounts in-house any more. It’s like outsourcing,” Smith says. Being a web-based service, Smith is well aware of the benefits of securing these types of services to reduce labour costs and therefore save costs for their clients. “We’ve used it [the cloud] to the extent that we’ve felt secure in using services for our customers.”
Software as a Service (SaaS) is another popular cloud system that more and more companies are benefiting from. Cyberbia, a Sydney-based digital agency providing digital services to large IT companies, has embraced SaaS for the company’s software needs.
“For us, the key software we need is the Adobe Creative Suite. We’ve always used Photoshop, Illustrator, Dreamweaver and Flash and we’ve bought some full licences over the years, but when the subscription model started, it just allowed us a bit of flexibility to take on the ebb and flow of whether we needed more or less people,” says owner Colin Laidlaw.
Instead of having to go out and purchase software from Harvey Norman every time they got a job, Laidlaw now can quickly add another subscription onto their service. “There’s a whole lot of administration stuff that has just become a no brainer now because of the cloud,” explains Laidlaw.
Other than making services far more easily accessible, there are a number of business practices that have now eliminated the need for in-house staff and systems, which is a huge cost saving measure for businesses.
“In the traditional server environment you’d over commit, because you’d be buying now with the assumption that you were going to grow to a certain point in the future. So the server you’d buy today might only get five percent utilisation, until you do grow. Whereas in the cloud model you can be getting the most utilisation out of your server. It’s the most effective use of cloud capital,” says Jason Potter CTO of Huge Digital, a digital venture incubator.
Most importantly, cloud services have the ability to save small businesses money. “In some cases yes, we’re saving money,” Potter confirms. “We’re still working through the best strategies for it. It does make projects a little bit more complex from a cost perspective because it’s not just a straight number to offer to clients. But you have the ability to move it around. The advantage comes with scale.”
Ninefold’s James agrees that for small businesses, the flexibility and cost savings in staff and equipment are worth it by getting into the cloud. “So instead, all the hard earned dollars, and the cashflow that is fundamental to small businesses can go into product development and marketing.”
For Andrew Talati, the managing director of Fitstyler, an outdoor personal training company based in Melbourne, cloud services are what allow his business model to work. “We use a cloud-based system called Citrix which runs an enterprise grade Virtual Private Network (VPN). Part of the software that’s critical to that is Sage Business Solutions which helps us manage all our customer relationships and communications between all the stakeholders, clients, suppliers, franchisees and staff.”
The trainers and franchisees that work for Talati need access to a cloud-based system wherever they go. “Being that we are an exclusively outdoor fitness training business, we don’t have a studio or gym, the staff or the franchisees are reliant on having a centralised system that they can access whether they’re in a park, a café, a home office, or in our headquarters,” Talati explains. “That’s where the technology comes to the forefront that’s given us the ability to grow and scale the business and add resources as it grows.”
This type of flexibility is exactly what defines the cloud, says James. “We’re all connected these days, through our iPad, iPhone, BlackBerry: whatever device you’ve got, there’s mobility. We interact with a lot of small business people who work from home, or they might have a physical outlet or they might have a business which is in collaboration with people around the world, and they can access what they need on a plane, on a train and elsewhere. Connectivity is right at the heart of what we do.”
Every small business does need to consider the downsides to being in the cloud or relying solely on internet-based services for some or all of their systems.
James says that there are some questions that every business should ask of a potential cloud provider. “Firstly find out if it’s true cloud. Everyone today claims to be using or selling cloud. The way we define the cloud is to ask is it really self-service and can you swipe your credit card and get started? Do you need to sign a lengthy contract that commits you to a period because if you do it’s not really in the concept of cloud utility.”
Privacy and security are also major issues for all businesses and have been discussed at length by every new cloud provider joining the market. But another very important issue to scrutinise when choosing a service is where they are based. Being locally accessible may mean you have better access to assistance more often, but there are legal issues to consider. “The concept of data jurisdiction is becoming more and more important over the past 12 months. If your data is stored in Australia with an Australian company, you know where it is, you can get access to it. If it is stored in Australia by a foreign owner, particularly a US multinational for example, it is subject to US law and the Patriot Act,” James warns.
Talati however, is comforted by the fact that if anything were to happen to his business, he’d still have access to everything he needed through any internet-connected device. “Nothing is held locally be it on an iPad or a local computer: all we’re doing is streaming pixels. So in the event a computer was compromised locally, all you do is switch off the user and reset the password. The risk of data corruption is a lot less because the data isn’t leaving the confines of the hosted environment.”
Laidlaw has been so happy with the freedom that Adobe’s SaaS has offered him that he’s looking into moving Cyberbia’s trafficking and accounts system into the cloud as well. With that in mind, he’s excited about what it will mean for his business.
“It will free up cashflow and time,” he says. “For me and my account manager I think it will free up at least a few days over a month. That allows us to then go and work on getting more business, working on the jobs we’ve got or working on our clients. I think it would create a more efficient business.”
Time is another important factor that James is keen to promote about cloud products. “Speed to market is fundamentally important,” he says. “If you’re selling an application you can quickly get it to market using social media and cloud technology. The world we live in is connected and is global and our customers more and more are online.” It seems competing with global businesses is exactly what all cloud users should be doing.
While Smith couldn’t comment on whether or not he’s standing out against the competition by being in the cloud, as the company has no direct competition, he knows it’s been the secret to Worklife Essentials’ success. “The thing that’s unique about us is partly that we’re cloud-based, but also that the site can be enhanced by people in each country. The cloud facilitates our business for sure. Without that we wouldn’t be able to have people writing articles about things in Germany or Russia and be able to have them work directly with our publishing system.”
So much is being written about cloud computing and what it offers, that it’s easy to get bogged down by buzzwords and spin. But there are plenty of services available out there to small businesses looking to reduce costs, improve cashflow, and be able to provide their products to audiences faster and more efficiently than their competitors. These businesses have managed to do that by being smart about their choices, their research and ensuring that whatever they end up using, they’re accessing the most useful silver lining of every cloud.
Can the cloud help small businesses leapfrog the competition?
Some advice from Salesforce.com.
Cloud computing is a simple idea but it can have a big impact on your bottom line.
As a small business your goals are typically to streamline your business and push sales skywards. But how do you compete with the big companies without spending a fortune on complicated systems?
With cloud computing, you can. For the first time, small businesses have access to the same enterprise-class data systems as the largest corporations and government organisations for supercharging sales, strengthening customer relationships, and more.
Small businesses are using all kinds of cloud applications on their computers and iPhones, even custom-built ones. Why? Because you can be up and running in no time; unheard of with traditional software. You only pay for what you need and there’s no software, servers or upgrades, keeping costs low.
Plus it’s more reliable and scalable than building your own systems. Your data is automatically backed up, and because you access it from a browser, you can keep your business moving from anywhere, even poolside!
These reasons are as compelling for SMBs as for enterprises, if not more so. The fact is the cloud lets small businesses do more with less. Suddenly you’re competing in a much larger playing field.